Mention the word “anthropologist,” and most people envision a professor outfitted in khakis, living in a tent, and observing a small community in a remote part of the world as it goes about its daily life. Karen Ho, an assistant professor of anthropology at the University of Minnesota, decided instead to study a vastly different community: Wall Street deal-makers and investment bankers. The results of her research will be published in the forthcoming: Liquidated: An Ethnography of Wall Street, from Duke University Press.

Ho took a year off from her graduate studies at Princeton and landed a position as a business analyst at Bankers Trust, which now is part of Deutsche Bank. (Admittedly, Ho’s anthropology education might seem like a hindrance when it came to landing a banking position. However, her Princeton pedigree helped her get in the door. “Wall Street mainly recruits from a few elite universities,” she notes. “In many ways, when you’re from an elite university, there’s this halo effect.”)

Ho’s interest in Wall Street was piqued in the 1980s, when she saw companies’ stock prices rise even as they laid off thousands of employees and embarked on serial restructuring programs. “My initial reaction was that this was a contradiction. Constant restructuring doesn’t necessarily mean that productivity is up,” she says.

Ho set out to find out just how stock analysts and investment bankers evaluated companies. While greed has often been blamed for economic booms an busts, Ho notes that greed isn’t a modern phenomenon. After all, the topic gets heavy play in the Bible, and is a major theme in Shakespeare’s play The Merchant of Venice.

Instead, Ho notes, “The culture we’re embedded in will shape our choices and behavior.” What Ho found was a “reframing of corporate values,” beginning in the 1980s. Until then, companies were fairly universally viewed as serving multiple constituencies — employees, customers, communities, and, of course, shareholders. They also were seen as long-term social institutions, whose management was charged with sustaining the company over time, rather than focusing almost solely on quarterly earnings.

With the takeover mania of the 1980s, that changed. “Short-term shareholder value and deal-making became key measures of corporate success,” Ho notes. In part, this was because Wall Street bankers themselves live in a culture that prizes both high risks and equally high rewards. They fail to appreciate that this approach often undermines long-term shareholder value and can be disastrous for workers who lack seven-figure incomes.

The deregulation that occurred under the Reagan administration, as well as the repeal of the Glass-Steagall Act during the Clinton administration, solidified Wall Street’s influence, Ho says. She adds that the ways in which investors view and help set stock prices are cultural. While they could focus on the strategies and initiatives that will set a firm’s course over the long term, they instead choose to focus on deals that often do little to boost the ongoing performance of many companies (see Daimler-Chrysler and Cerberus).

Of course, Wall Street isn’t the only one to blame here. On the corporate side, management compensation skyrocketed. “There was a de-linking of their salaries to those of everyday workers, and a re-linking to Wall Street,” Ho says.

This isn’t to suggest that the business world pre-1980 was as good as it could get. Ho notes that many companies and industries – the auto industry being a case in point – needed to change. “I think it was a missed opportunity,” Ho says. “Many companies could have benefited from large-scale restructuring, but Wall Street’s structure was focused on the short term.” ###